Securitize, a compliance platform for digitising securities on the blockchain, has raised $12.75 million to tokenise the $7 trillion securities industry.
The Series A fundraising round was led by Blockchain Capital, and saw investment from others including Coinbase Ventures, Global Brain, NXTP and OK Capital. This round of funding comes ahead of Securitize’s plans to launch a Digital Security Offering (DSO) in 2019. Brad Stephens, co-founder and managing partner at Blockchain Capital, will also be joining the platform’s board of directors.
According to its whitepaper, Securitize is aiming to become “the leading platform for enabling compliant Digital Securities issuance and liquidity on the blockchain.” Its funding comes at a time when the U.S. Securities and Exchange Commission (SEC) announced earlier this month that:
“Any entity that provides a marketplace for bringing together buyers and sellers of securities, regardless of the applied technology, must determine whether its activities meet the definition of an exchange under the federal securities laws.”
In response to the SEC statement, Carlos Domingo, co-founder and CEO of Securitize, said: “The burden is on us in the industry to develop products and services that ensure regulatory compliance both here in the USA and in countries where investors are investing in, and trading digital securities.”
According to the platform, its “Digital Securities (DS) Protocol has the highest adoption rate in the market today and provides a seamless compliant integration solution for issuers, investors and exchanges throughout the entire digital security lifecycle, from initial issuance to trading, distribution, and governance.”
Earlier this month, AirSwap and the OpenFinance Network are just a few that have traded digital securities on the DS Protocol in a compliant way. A few digital security issuers for blockchain venture capital firms on platform include 22x, Augmate, Blockchain Capital, and SPiCE VC.
“In our view, Securitize’s end-to-end digital securities issuance and compliance platform will play a key role in the development of the security token market,” said Yasuhiko Yurimoto, CEO of Global Brain, speaking of the funding round. “We are excited to work with Securitize to set up a presence in Japan and leverage its network to assist the company in penetrating the Japan/Asia market.”
Domingo also noted that with an increase in the number of digital security exchanges and marketplaces coming online, and the need for them to be traded in a compliant way, “the opportunities for investors will be unlike anything seen before in the asset-backed securities markets.”